In our recent publication, we introduced a curated list titled "11 Ridiculously Cheap Stocks to Invest In". Among these potential investment opportunities, we are turning our attention towards Helen of Troy Limited (NASDAQ:HELE) to assess its position against other similarly inexpensive stocks.

Investing, much like shopping for bargains in the commodity market, requires a keen eye for relative prices and discerning value. Just as one seeks discounted products to maximize value for money in physical markets, the same principle holds true in the financial markets. In both cases, price is a critical factor that can influence decision-making.

Amid an environment saturated with overpriced stocks, the ability to identify hidden gems sets apart the savvy investor from the impulsive one. An investor who understands that the essence of value lies not merely in the purchase itself but in the price paid is better positioned to uncover overlooked stocks brimming with potential.

To clarify what constitutes a cheap stock, it is essential to explore two prevalent interpretations. The first definition posits that a stock is considered cheap if it possesses a low share price. The second, and more widely accepted interpretation, categorizes an undervalued stock as a cheap stock. Our analysis aligns with the latter definition, suggesting that a cheap stock is one trading below its intrinsic value informed by metrics such as earnings, revenue, or asset valuation. This discrepancy signals to investors that the stock is cheap relative to its true potential, making it an attractive investment opportunity.

One popular method for identifying cheap stocks involves examining the forward price-to-earnings (P/E) ratio. This financial metric enables investors to gauge how much they are paying for each dollar of a companys earnings. A low forward P/E ratio might indicate an undervalued stock, especially when compared to industry rivals, historical averages, and broader market performance.

A report from Hoover Capital Management (HCM) delves into the historical performance of value stocks against growth stocks through the French High Minus Low (HML) factor. The findings, which encompass an impressive 97 years of data from July 1926 to December 2023, strongly bolster the case for value investing. The cumulative return of value stocks has eclipsed that of growth stocks by an astounding 3,000%. To put this into perspective, value investing has delivered returns 30 times higher than those of growth investing.

Additionally, research conducted by economist Victoria Galsband has shown that cheap stocks outperformed growth stocks across all G7 countriesfrom Canada and the United States to Japan and leading European nationsduring the period from 1975 to 2010.

Further solidifying this narrative, another study examined how changes in company listings on the S&P 500 index affect stock valuations. This research indicated that removals from the index are often linked to undervaluation, while additions typically correlate with inflated valuations. The findings revealed that companies removed from the S&P 500, between 1990 and 2022, outperformed those added by over 5% annually. These insights lend significant credence to our assertion that undervalued stocks, which are essentially cheap stocks, hold a greater likelihood of delivering superior returns.